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Broadway Financial Could Improve But Is Currently Too Risky


  • BYFC has recently merged with First City Bank from Washington. The bank's combined asset base could dilute its non-interest costs and improve profitability.
  • However, BYFC has shown bad loan allocation policies in the past, generating substantial losses during the GFC, of up to 10% of the book.
  • The company also faces short-term risks, like enormous non recognized losses on its books, and the accrual effect of CECL loan loss recognition.
  • Because of its fixed rate mortgage book, the bank is not currently benefiting from the increase in interest rates.
  • The bank's biggest advantage is access to a very cheap deposit base that makes up almost 90% of its interest bearing liabilities.
Banker discusses banking services to new customer

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Broadway Financial Corp (NASDAQ:BYFC) is a California-based bank that recently merged with First City, a Washington-based bank. Both companies concentrate on lower and middle income client multifamily mortgages.

BYFC has a history of under profitability caused by a small asset

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